Paramount Trading credits new cleaning service for profit spike
The 18 per cent spike in annual profit reported by Paramount Trading Jamaica was partly due to a new service it began offering last year, according to managing director Hugh Graham.
Paramount made annual net profit of $173 million at year end May 2016, up from $146 million. Revenue rose from $869 million to break through $1 billion for the first time.
Graham told the Financial Gleaner that his company had experimented for two years on a new product before rolling out a cleaning service for boilers, steam generators, and heat exchangers that up to then, was only provided by overseas companies.
"It is a kind of engineering, chemical solution, which was offered by persons from outside that would come in and do these projects," said Graham. "So it's a new area for us and one where we see tremendous growth potential."
He said $22 million of the $38 million of expenses incurred by Paramount last year was spent on the cleaning project.
In other developments for the company last year, Paramount Trading entered into arrangements with an international company to distribute SIKA-branded hardware products. The products include anchoring adhesives and sealants principally distributed to the commercial-hardware market.
The company also made headway on a joint venture with Allegheny Petroleum to manufacture its Altra lubricant in Jamaica. The partners officially launched construction of the lubricants plant around two weeks ago.
Paramount listed on the junior market of the Jamaica Stock Exchange in 2012. Graham says going public was a good decision for the company.
"The junior stock exchange and its requirements really push you to be a top-class company if you really take it seriously. We have found that we've had to get better-quality people to do the work that was needed, and intrinsically, we have a better-quality output," he said.
He adds that Paramount is looking towards the present financial year with optimism, especially the Allegheny partnership, under which Paramount becomes the first Jamaican company to manufacture lubricants locally. All others in the trade sell imported brands.